Australian domestic meat prices continue to soar

Beef might be off the Christmas menu for many Australians this year with prices continuing to rise dramatically.

Over the past year, Australian domestic beef prices have more than doubled with drought hitting Australian farms hard.

Yet, domestic supply and demand is not the only cause of the surging local market prices. In fact, Meat and Livestock Australia (MLA) says it is expecting the annual cattle slaughter for 2015 to hit an unprecedented high, in line with the record figures experienced over the past three years.

“This will be the third consecutive year of cattle slaughter exceeding eight million head, something that’s never been seen before. As a result, beef production is estimated to reach 2.46 million tonnes cwt – which will be the second highest volume ever,” said Ben Thomas, Manager of Market Information for MLA.

High prices are expected to continue into 2016 largely because the price is being impacted by strong international demand for Australian meat while the Australian dollar remains weak.

Australia is currently the world’s third largest exporter of beef.

Bacon prices rising

Despite recent research from the World Health Organisation (WHO) which linked the consumption of processed meats such as bacon to cancer, Australian domestic bacon prices are also sitting at a record high.

According to an ABC Rural report, the price of bacon has been forcing many Australians to look for cheaper alternatives. ABC Rural also reported on the 5 November 2015 that baconer pigs averaged more than AUD$4.00 per kg live weight at the Dublin pig sale in South Australia, a 45 cent per kilo increase on the prior week.

Lamb prices

Lamb prices have remained high across the entirety of 2015. International demand, weather and the low Australian dollar have been blamed for the high domestic lamb prices in Australia.

Australia is the world’s second largest exporter of lamb.

In the MLA’s third quarter update for 2015 it stated:

“After six months, the national light lamb indicator (12-18kg cwt) averaged 527¢/kg cwt, up 10%, the restocker indicator (0-18kg cwt) was up 9% at 531¢/kg cwt, while heavy lambs were only 1¢ higher than the same period last year, averaging 554¢/kg cwt.”

Goat prices

The MLA recently reported Australian goat meat exports for October 2015 were 8 per cent higher than the five year average for the month.

“In stark contrast to 2013, where high goat supply placed downward pressure on prices, the national average over-the-hook (OTH) export goat prices during 2014 shot up 50% year-on-year, as most weight categories averaged 300¢/kg cwt (10.1-12kg cwt to 20.1kg+ cwt),” the MLA reported in its latest goat meat industry analysis.

International demand was again a driver for the increase in price and volume. Goat meat is the most widely consumed red meat in the world.

Although Australia is a relatively small producer of goat meat, it is the largest international exporter. Hispanic populations in the US and Chinese in Taiwan’s population are Australia’s biggest markets for goat meat. Exports to mainland China experienced a near four-fold increase year-on-year for October 2015.

Snapshot key facts: Australian Meat Industry 2015

The off-farm value (domestic expenditure plus export value) of the Australian beef and cattle industry was $18.21 billion in 2014 – 2015.

The off-farm meat value of the Australian sheep meat industry was approximately $5 billion in 2014 – 2015.

Australia is the world’s largest exporter of goat meat.

Between 2014 – 15 Australia exported 34, 354 tons of goat meat.

The two biggest markets for goat meat exports from Australia is Taiwan and the US. Demand in the US comes from its large Hispanic population.